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Thames Water's board structure has been changed to address regulatory concerns raised by Ofwat. The changes follow a public consultation into the recent takeover of Thames Water Utilities Limited (Thames Water) by Kemble Water Limited (Kemble). Regina Finn, Ofwat Chief Executive, said: "It is important that under its new ownership Thames Water concentrates on improving its performance, delivering for its customers and meeting its regulatory obligations. We see no reason why Thames Water cannot achieve this, and we will be looking to the company to demonstrate its commitment to its customers by, amongst other things, meeting its leakage target this year." In the public consultation Ofwat raised concerns about the proposed board structure for Thames Water, including lack of executive representation. Respondents echoed these concerns. To address these concerns, Kemble has appointed three executive officers to the board of Thames Water to replace three of the existing shareholder-appointed non-executive directors. Kemble will also conduct an effectiveness review of the board governance arrangements within the next six to 12 months, in line with the guidelines laid out in the Combined Code on Corporate Governance. Ofwat will look carefully at the outcome of that review to be assured that the new board structure works in the interests of customers as well as shareholders. Ofwat will make changes to Thames Water's conditions of appointment (licence) to reflect the new ownership. This will ensure that the regulated water and sewerage company is effectively ring-fenced from the rest of the Kemble group and customers' interests are protected. Kemble proposes to implement a revised financial structure for Thames Water later this year. Ofwat will publish its views on the proposed change once it, and the rating agencies, have completed their respective reviews. Notes to editors: 1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will allow companies to carry out their functions properly, and finance them. Its duties include protecting the interests of consumers, wherever appropriate by promoting effective competition. 2. A copy of Ofwat's position paper will be available on the Ofwat website on www.ofwat.gov.uk or from the Ofwat library on 0121 625 1373. 3. The three executive officers Kemble will appoint to the Thames Board will be the Chief Executive Officer, Chief Financial Officer and the Chief Operating Officer. 4. Kemble originally proposed that the board of Thames Water would comprise 11 shareholder-appointed non-executive directors and three independent non-executive directors. The proposed board would have no executive directors. 5. In July 2006, Ofwat secured a legally binding undertaking from Thames Water to replace additional leaking water mains at the expense of its shareholders. The company will spend an extra £150 million on an additional 368 kilometres of water mains in London. This follows Thames Water's breach of its leakage target for 2005-06. 6. Thames Water is an appointed water company, regulated by Ofwat, with a regulatory capital value of £5,891 million at 31 March 2006. It provides drinking water to eight million people and sewerage services to 13 million customers, the largest of any water and sewerage company in England and Wales. It covers a supply area of 5,000 square miles across London and the Thames Valley. Media enquiries to Ofwat Press Office on: 0121 625 1442/1496/1416 Out of hours enquiries to: 0121 625 1300  | ||||||
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